Brunei Darussalam: Financial Sector Blueprint - AMBD Darussalam I Financial Sector Blueprint I ... that complements the recently published Brunei Darussalam Financial Sector Blueprint

Brunei Darussalam:

Financial SectorBlueprintHarnessing our Economic Potential

2016 - 2025

Prospectus

Brunei Darussalam I Financial Sector Blueprint I Prospectus I 2016-2025 2

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Table of Contents

Sabda by HRH Chairman of AMBD 5

Future Directions 7

Pillar I: Monetary and Financial Stability 13

Monetary Stability 14

International Regulatory Standards 14

AMBD Risk-Based Approach 14

Strengthening AML/CFT Compliance 15

Credit & Underwriting Risk Management 15

Pillar II: Competitive and Innovative Financial

Institutions and Services 16

Commercial Banks and Takaful / Insurance 17

Sukuk Potential 17

Syariah Governance Framework 18

Securities Exchange 19

Investment Opportunities in Brunei 19

Islamic Fund Management 20

Private Equity & Venture Capital 20

Pillar IV: Enhanced International Integration 24

ASEAN: One Vision – One Identity 25

Regional Trade and Support 25

Brunei Darussalam’s Growing International Partnerships 26

Pillar III: Robust and Modern Infrastructure 21

Digital Strategy 22

An e-Commerce Economy 22

Global Interconnectivity: Air Logistics Hub 23

Financial Services Infrastructure 23

Pillar V: Human Capital Development 27

Financial Education: Top-Down Approach 28

Centre for Islamic Banking, Finance and Management 28

International in Scope 29

Retaining Local Talent 29

Developing a Savings Culture 29

The Five Pillars: Strategic Roadmap 12

Addendum 30

List of Financial Institutions Licensed by AMBD 31

National Bodies 33

Publications 34

Foreword by Managing Director 6


Brunei Darussalam: Fact Sheet

BND 18.6 billion/ USD 13.1 billion

(2015)

BND 44,571/ USD 31,388 (2015) Oil and natural gas, timber,

fisheries, agricultural products

5.765 km2 with a coastline of 161

km along the South China Sea.

About 70% of its land area is

covered by rainforest reserves

Tropical, hot, humid, rainy with

temperatures ranging between 23ºC

and 32ºC. Average annual rainfall is

320 cm. There is no history of

natural disasters

GDP GDP Per CapitaMain Natural

Resources

Religion

Islam is the official religion and all other religions may be practised in peace and harmony by the persons professing them

Currency

Brunei Dollar (BND) is at one to one parity to the Singapore Dollar

and interchangeable dollar notes are available in denominations of

$1, $5, $10, $50, $100, $1000 and $10,000. Coins

are in 1,5,10, 20,and 50 cents denominations

Time Zone

GMT +0800 (Standard Time)

Land Area Climate Languages

Negara Brunei Darussalam

(Abode of Peace)

Bandar Seri Begawan 417,200 (2015); annual

population growth of 1.3%

Bahasa Melayu (Malay) is the

official language. English is widely

spoken in business

Official Name Capital Population


abda by

His Royal Highness Prince Haji Al-Muhtadee Billah ibni

His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah,

The Crown Prince and Senior Minister at the Prime Minister’s Office

As Chairman of Autoriti Monetari Brunei Darussalam

بسم هللا الرحمن الرحيم

السالم عليكم ورحمة هللا وبركاته

الحمد هلل رب العالمين، والصالة والسالم على أشرف المرسلين، سيدنا محمد

وعلى آله وصحبه أجمعين، وبعد

awasan 2035 sets out the economic vision of

Brunei Darussalam over the next two decades: developing

a diversified, dynamic and sustainable economy which

delivers a level of income per capita within the top 10

countries in the world.

In recent years, Brunei Darussalam has made bold strides in

enhancing its international credibility in the financial sector.

From implementing effective regulation through the Securities

Market Order (2013), to chairing a series of ASEAN Finance

and Central Banks Meetings in 2013 to laying the foundations

of an economy adapting fit for the digital age.

Looking ahead, one component of Brunei Darussalam’s financial

ecosystem that has colossal scope for growth is the turning of

the nation into an international hub for Islamic Finance.

Steeped rich in Islamic traditions and culture, Brunei

Darussalam’s continued political stability and favourable

international ties would be conducive for foreign direct

investments to collectively participate in the economic

prosperity of the region.

Against this backdrop, I am delighted to announce that Brunei

Darussalam is ‘open for business’ and welcomes the presence

of international institutions in joining our country in the path to

further progress the financial sector.

It is thus with great pleasure to present to you this Prospectus

that complements the recently published Brunei Darussalam

Financial Sector Blueprint (FSBP), 2016-2025. It lays out a

high-level roadmap of how Brunei Darussalam’s financial

services will grow into one of Asia’s most competitive and

innovative hubs.

W

S


Foreword by Managing Director

am delighted to announce the release of the Prospectus

version of Brunei Darussalam’s Financial Sector Blueprint,

2016-2025. The blueprint sets out the strategic framework

within which Autoriti Monetari Brunei Darussalam (AMBD) will

be working with other ministries and stakeholders to reach the

objectives of Wawasan 2035.

The Blueprint is being released at an exciting time for the

nation’s financial sector. Buoyed by a stream of reforms, Brunei

Darussalam ranked as the most-improved country in the World

Bank’s 2017 Ease of Doing Business Report.

Recent statistics by the Department of Economic Planning and

Development show the financial sector’s share to GDP at

around 5.1%.

بسم هللا الرحمن الرحيم

السالم عليكم ورحمة هللا وبركاتهBuilding upon the platform developed, and leveraging the

myriad of opportunities in Asia - the world’s fastest growing

region - Wawasan 2035 envisages that, by 2035, the

financial sector's contribution to GDP will have expanded to

8% of GDP.

The Blueprint lays out a vision of the financial sector in the

following ways:

1. Financial Services – an enabler for growth

2. Provider of niche financial services

3. Competitive and Innovative Financial Institutions

and Services

4. Development of a supportive 'eco-system'

5. Shift from ‘government dependence’ to

‘self-reliance

These steps provide the avenues by which Brunei

Darussalam’s financial sector can sustainably grow its

contribution to GDP and support the growth of the economy.

This Prospectus is an easy-read guide to the Blueprint. It

aims to dissect the Blueprint into bite-size forms, allowing

the reader to quickly understand how Brunei Darussalam

intends to strategically evolve its financial sector into Asia’s

most innovative and dynamic Islamic Finance hub.

Yusof bin Haji Abd Rahman

Managing Director, AMBD

I


Future Directions

The Evolving Role of the

Financial Services Sector The following section outlines the strides made by

Brunei Darussalam’s financial sector in recent

years and outlines the plans for its future

evolution:

Strengthening the Foundations 8

Pillars of the Future 9

An Enabler of Growth 10


Strengthening the Foundations

ocused on growing the financial sector’s contribution to GDP

from 5.1% to 8% by 2035, Brunei Darussalam has begun to build

the springboard for the sector’s growth.

Though not affected by the 2008 Global Financial Crisis, Brunei

Darussalam has made a number of positive strides to strengthen

its financial services platform, regulatory robustness and linkages

to an interconnected global economy.

Recent Key Achievements of

Brunei Darussalam’s Financial Sector

F

Aligned to International

Anti-Money Laundering

Standards, such as FATF

Greater policy initiatives

to modernise ICT infrastructure

Strengthened international

economic linkages

Strengthened surveillance,

regulatory & supervisory

framework

Establishment of AMBD as the

Central Bank of Brunei Darussalam

Chaired the ASEAN Central Bank

Governors Meeting, 2013

Growth in Brunei Darussalam as

an international Islamic hub

Enhanced access to financing

especially to SMEs &

micro-enterprises

“One of the economies showing the most

notable improvement in ‘Doing Business’

in 2017 was Brunei Darussalam.”Source: World Bank

IndicatorBrunei Rank

(DB 2016)

Brunei Rank

(DB 2017)

Change in

Ranks

Overall (out of 189) 97 72 +25

Getting Electricity 76 21 55

Registering

Property135 134 1

Getting Credit 78 62 16

Protecting Minority

Investors118 102 16

Paying Taxes 96 89 7

Trading Across

Borders143 142 1

Enforcing

Contracts115 93 22

Resolving

Insolvency997 57 40

Starting a

Business* 181 74 +107

* The Starting a Business Indicator conveys the rankings from the 2015 and 2016

World Bank Doing Business reports


The Evolving Role of the Financial Services Sector

Strategic Objectives

Monetary and

Financial

Stability

Competitive

and

Innovative

Financial

Institutions

Robust and

Modern

Infrastructure

Enhanced

International

Integration

Human

Capital

Development

Pil

lar

I

Pil

lar

II

Pil

lar

III

Pil

lar

IV

Pil

lar

V

Dynamic and

Diversified Financial Sector

Future Directions

Currency

Interchangeability

Agreement

International regulatory

standards

AMBD Risk-Based

Approach

Strengthened

AML/CFT compliance

Credit and

Underwriting Risk

Management

Major infrastructure

finance

SME growth support

Government-Linked

Companies reform

Capital market

development

Islamic Finance

Fund Management

An e-Commerce

Economy

Global

Interconnectivity:

Air Logistics Hub

Financial Services

Infrastructure

Financial Services

Central Business

District

ASEAN: One Vision –

One Identity

Cultivate Trans-Pacific

Partnership

Develop RCEP

Support growth as a

regional professional

support/'back-office

centre

Financial Education:

Top-Down Approach

Centre for Islamic

Banking,

Finance and

Management (CIBFM)

Financial

Professionalism and

Integrity

International in Scope

Public-private sector

dialogue

(Brunei Darussalam Financial System in 2016)

The Blueprint identifies five key pillars that form critical components

of a sustainable financial ecosystem.


An Enabler of Growth

The programs and plans set out within the Blueprint are at

varying stages of development. In some cases, programs have

already been developed and are being implemented, others are

at the planning stage and some are included in the Blueprint as

possibilities for future study.

It is important to understand the broad intentions and objectives

of the financial sector. The financial sector should effectively

and efficiently allocate resources to the relevant activities that

facilitate the diversification of Brunei Darussalam’s economy

towards the financial services sector. The graphic below

identifies core areas where the financial services sector can act

as an enabler for growth for the Sultanate.

Financial Services

An Enabler

of Growth

2

3

4

5

6

1Expanding Brunei

Darussalam’s Islamic

Finance capabilities

Financing education,

retirement & healthcare

products

Financing

internationalisation

of businesses

Financing modern (hard

and soft) infrastructure

Financing Innovation &

Entrepreneurship

Financing new areas

of growth, such as FinTech


Currency Interchangeability

Agreement with Singapore

The Labour Force of

Participation Rate of

women is 58.3%

Financial Sector

contributes 5.1% to GDP.

Wawasan 2035 envisages

that, by 2035, contribution to

GDP has grown to 8%

Business Friendly Tax Environment

No Sales Tax No Personal

Income Tax

No Capital

Gains Tax

Low

Corporate Tax

Brunei Darussalam: Economic Fast Facts

Brunei has one of

Top 10

GDP Per Capita in Asia

Ranked number #1As the most improved

country in the world in the

World Bank’s 2017 Doing

Business Report


The following section conveys the developing

features and policy directions of Brunei Darussalam’s

financial landscape. These broad features provide the

backdrop that Brunei Darussalam’s financial service

sector can build upon.

Pillar I: Monetary and Financial

Stability13

Pillar II: Competitive and Innovative

Financial Institutions and Services16

Pillar III: Robust and Modern

Infrastructure21

Pillar IV: Enhanced International

Integration24

Pillar V: Human Capital Development 27

The FivePillars

The Foundation of a

New Age of Finance


runei Darussalam has established a

stable monetary and competitive fiscal

environment, supported by AMBD’s

progressively robust regulatory framework.

Indeed, the World Economic Forum has

consistently ranked Brunei Darussalam

highly as a destination renowned for a

stable macroeconomic environment.

The cornerstone of Brunei Darussalam's

monetary policy remains the Currency

Interchangeability Agreement (CIA) with

Singapore and the adoption of the Currency

Board Framework since 1967.

1

1.1

1.2

1.3

1.4

1.5

1.6

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012

2012

2012

2013

2013

2013

2014

2014

2014

2015

2015

2015

2016

Historical SGD/USD Exchange Rates: 2006 - 2016

Source: Bloomberg

Pillar I: Monetary and Financial Stability

B

In 2015, the banking

sector’s average Capital

Adequacy Ratio was

21.5% - well above international

regulatory requirements

Currency Interchangeability

Agreement with Singapore is

the bedrock of Brunei

Darussalam’s monetary stability

Over the last five years, AMBD has

strengthened the resilience of Brunei

Darussalam's financial system, adapted to an

increasingly digital financial landscape and

enhanced its credibility through the forging of

alliances and Memorandum of

Understandings with international regulators

and central banks.

Looking ahead, AMBD has developed

numerous strategic plans to support Brunei

Darussalam’s financial sector’s growth.

S T R AT E G I C R O AD M AP : P O L I C Y D I R E C T I O N S


Pillar I: Monetary and Financial StabilityS T R AT E G I C R O AD M AP : P O L I C Y D I R E C T I O N S

• Brunei Darussalam to maintain the Currency

Interchangeability Agreement (CIA) with Singapore, and the

Currency Board framework, for the foreseeable future.

• Development of the market operations by AMBD to foster

an efficient and competitive interbank money market and

a secondary market in Government and private issuance

of sukuk.

AMBD plans to:

• Consider whether financial institutions in Brunei

Darussalam should have a credit rating.

• Continuously review and develop the legal and regulatory

framework on par with international standards.

• Maintain a policy of licensing only demonstrably high

quality banks, insurers/takaful operators, and capital

market intermediaries.

Banks and insurers/takaful operators to be expected to maintain

levels of capital adequacy relative to the risks inherent in their

balance sheets and operations, that:

(i) Meet the required minimum international standards.

(ii) Avoid unnecessary complexity.

International Regulatory Standards

Monetary Stability

AMBD in its prudential supervision of licensed financial

institutions will:

• Become more risk-based focused.

• Work towards achieving full compliance with the

frameworks of core principles promulgated by the

international standard setters.

• Develop and train a cadre of supervisors with the

necessary skills and experience needed to uphold

resilient and robust regulatory standards.

AMBD Risk-Based Approach

Specimen

Specimen


Pillar I: Monetary and Financial StabilityS T R AT E G I C R O AD M AP : P O L I C Y D I R E C T I O N S

• An increased focus on the core credit and underwriting risks in

AMBD’s risk-based supervision. For banks, AMBD will be

looking to ensure that they have credit policies and practices

that ensure:

(i) Borrower Supervision

(ii) Monitoring of Loans

(iii) Diversify Loan Exposure

• AMBD will require insurers and takaful operators to ensure

that insurance and takaful risks are classified and priced

effectively by taking into account risk differentiation and

profiling.

Credit & Underwriting Risk Management

AMBD has responsibilities to supervise AML/CFT compliance

in line with the Financial Action Task Force (FATF) Standards.

• AMBD to continue to make AML/CFT supervision a priority

and to establish a risk-based supervision program based

on the National Risk Assessment.

Strengthening AML/CFT Compliance

The Expanding Role of AMBD

1Taking over responsibility

for the interbank clearing

house and establishing a

real-time gross settlement

(RTGS) system for the

settlement of interbank

payments.

2Through the Centre for

Islamic Banking, Finance

and Management (CIBFM),

adopt a stronger focus in

fostering human capacity

building for the financial

sector.

3Establishing and operating

a credit bureau and a

collateral registry.

4Addressing strategic

deficiencies in Brunei

Darussalam’s AML/CFT

regime.


Pillar II: Competitive and Innovative

Financial Institutions and Services

runei Darussalam is in a strong

position to compete within one of the global

financial sector’s fastest growing services:

Islamic Finance.

Brunei Darussalam’s political, social and

increasingly economic framework aligns to

Islamic teachings and principles, providing

the country with a competitive edge. This is

exemplified by the national commitment to

Melayu Islam Beraja philosophy which has

been in practice for 600 years, contributing

to political and social stability.

B As Islamic Finance continues to grow,

Brunei Darussalam aims to leverage against

such unique characteristics to evolve into an

Islamic Finance and Fund Management

hub, serving the fast-growing ASEAN

region.

In addition, Brunei Darussalam plans to

build on the Securities Market Order, 2013,

and launch a Securities Exchange that

would propel the country’s ambition to

become a critical part of Asia’s financial

services ecosystem.

USD64 Trillion

USD102 Trillion

2012

2020

Global Value of Assets under

Management (AUM)

2012 to 2020, USD

In 2015, Islamic banks

accounted for

52.4% of total banking assets in

Brunei Darussalam

Source: PwC

S T R AT E G I C R O AD M AP :

P O L I C Y D I R E C T I O N S


Pillar II: Islamic Finance

AMBD plans to:

• Ensure requirements are met for product disclosure by

financial institutions that readily enables customers to

compare products offered by competing institutions.

• Work with industry to tap into the potential growth of life

insurance/family takaful in Brunei Darussalam, especially

on savings / investments.

• Raise awareness on the benefits of insurance/takaful

products through various mediums including digital

platforms. Takaful operators should consider the use of

telephone, email and online applications as alternative

distribution channels.

• To support the development of the takaful market, the

industry should undertake further studies on takaful

concepts with a view to innovate.

Commercial Banks & Takaful/Insurance

The objective of the current Government sukuk programme is

to:

• Expand the domestic sukuk programme and channel

sukuk into the local market.

• Develop Brunei Darussalam’s yield curve as a benchmark

for corporate sukuk and to provide a safe and liquid

investment instrument for domestic financial institutions.

AMBD plans to undertake:

• Market operations for banking system liquidity-smoothing

purposes, which would help anchor the short end of the

yield curve.

Sukuk Potential

Through the Securities Exchange, AMBD

is also preparing for Government sukuk to

be extended to the secondary market,

providing institutional and retail investors

alternative investment opportunities.



Pillar II: Islamic Finance

In terms of the Syariah financial infrastructure, a key initiative

currently developed by AMBD is the Syariah Governance

Framework (SGF). The objectives of the SGF are to:

• Set out the expectations of AMBD on the Islamic Financial

Institution’s (IFI) Syariah governance structure, processes

and arrangements to ensure that all its operations and

business activities are Syariah compliant;

• Provide a comprehensive guidance to the Board of

Directors, Syariah Advisory Board and management of the

IFI in discharging its duties in matters relating to Syariah;

and

• Outline the Syariah Department functions relating to

Syariah review, Syariah audit and Syariah research.

Continuous program of sukuk issuance maintained by the

government since 2006

Only two instances of initial public offering of shares and

corporate sukuk in the last two decades

Minimal secondary market trading within Brunei of

capital market securities, and trades happen mostly

on 'over-the-counter' basis

Offering of mainly foreign Islamic funds and only one

domestic Islamic fund to retail investors

Development of Syariah compliant capital market

and Syariah compliant market index

Development of active money market for banks

Encourage local corporates and institutions to issue sukuk

Encourage participation of retail investors in capital market

Create a favorable environment to raise capital by issuing

IPO

AMBD to encourage the development of Islamic funds,

including REIT

Present State of Islamic Financial Market Future State of Islamic Financial Market

Syariah Governance Framework



Pillar II: Securities Exchange

• The launch of a Securities Exchange in Brunei Darussalam is

expected to catalyse economic growth and business

expansion through enabling Bruneian businesses alternative

funding routes.

Securities Exchange

Characteristics of Brunei

Darussalam’s

Securities Exchange

The aspiration is for the

characteristic features of

the Brunei Securities Exchange

to be unique. Fundamentally,

the vision of the exchange is to be simple in terms of design

and yet have comprehensive rules based on international

standards and best practices, to cater for various investment

products.

All companies will have the opportunity to be listed, provided

that they are able to meet the listing rules of the exchange,

which are currently being prepared. In addition, with Brunei

Darussalam being a Muslim country, a core objective of the

exchange is to provide for the needs of Muslim investors.

Sukuk, being one of the common types of Syariah compliant

securities, may potentially be listed on the Exchange.

Investment Opportunities in Brunei

Support for SME and Innovative

Services (e.g. FinTech)

Fostering the growth of the SME sector is a

Government policy priority. FinTech, in particular,

has been identified as a key growth engine.

2Government-Linked Companies Reform

The Government owns a significant number of

commercial enterprises. As the companies become

increasingly corporatised, there is scope for

Government-Linked Companies to become partly or

fully privatised.

3

Major Infrastructure Finance

There is a need for financing major national

construction and industrial projects, some of which

have already commenced.1



Located in the heart of a region that contains

5 of the 10 largest Islamic

countries by population, Brunei

Darussalam is well placed to capitalise

on emerging trends in Islamic fund

management.

Pillar II: Fund Management

AMBD plans to:

• Put in place supporting reforms and environment to attract

long-term focused private equity and venture capital

entities to help financing and improving the operations of

start-ups and small firms, as well as more mature firms in

transition.

Private Equity & Venture Capital

AMBD plans to:

• Structure the fund management industry around core

propositions that leverage Brunei Darussalam’s

competitive advantages, such as:

1. Islamic Fund Hub offering Syariah Compliant Products

2. Sustainable, Responsible and Impact Investing

3. Fund Management Services – Back Office Provider

Islamic Fund Management

794

1216

2666

2007 2012 2017

17% CAGR

Source: PwC

Islamic Finance- AUM USD1.2 trillion



runei Darussalam has made large

strides in upgrading its hard and soft

infrastructure.

The completion of the Brunei International

Airport refurbishment in 2015 has seen

passenger capacity double to 3 million and

will facilitate greater business activity in the

Sultanate. In ICT, the Government, in

concert with the private sector, have initiated

various strategic infrastructure projects such

as the 2010 FTTH programme to adapt

Brunei Darussalam and Bruneians to an

increasingly digital and globalised world.

There have also been direct improvements

in the country’s financial infrastructure.

AMBD’s major programme to revamp Brunei

Darussalam’s domestic electronic payments

system and national transition to e-

commerce, is an example of the fast-paced

changes in the sector.

Looking ahead, Brunei Darussalam has

numerous initiatives designed to transition

the economy into a digital age.

Pillar III: Robust and Modern Infrastructure

B

Aligned to Wawasan

2035,

Brunei Darussalam aims to

build an economy of

ICT-Smart Citizens

The UN International

Telecommunication

Union ICT Development Index,

2015, ranked Brunei

Darussalam

71/167 countries.

Up 18 rankings from its

2010 score




AMBD plans to:

• Complete the automated clearing house and thereafter

an interbank retail payments infrastructure.

• Be active in the planning groups for the integration of

payments networks across ASEAN, which is expected to

begin with RTGS and CSD Linkages.

• Establish the sukuk CSD and a Securities Exchange

trading platform, and creation of the associated securities

settlement system for effecting transfer of title of

securities traded on a DvP basis via RTGS.

An e-Commerce Economy

AMBD plans to:

• Continue to grow the FinTech Unit, developing its

capabilities and knowledge sharing with other national

regulators.

• Adopt and support developments in FinTech that can

bring innovation to the financial sector and promote

financial inclusion.

• Raise awareness of the ICT sector to the public.

• Liaise and coordinate with Brunei National Cyber Security

Working Group.

• Formulate, review and update regulations on Cyber

Security and Technology Risks for financial sector.

Digital Strategy


Building Brunei Darussalam’s Digital

Landscape: AITI Initiatives

Provide Accreditation: AAB Status

Offer Financial Assistance: AITI Grant Scheme

Catalyse Innovation: Host Local

and Regional ICT Competitions

Develop Capacity Building

Energise Market Access



It is the intention of Brunei Darussalam to:

• Develop a financial sector nucleus that attracts financial

service entities to a localised destination within Brunei

Darussalam.

• Develop other functions of the Credit Bureau in

consultation with current and potential users.

• Operationalise the new Collateral Registry.

Financial Services Infrastructure

Brunei Darussalam’s national airline carrier, Royal Brunei

(RB), has launched a new five-year plan (2016-2021) focused

upon:

• Enhancing the international connectivity, through

establishing new market routes.

• Supporting the growth of new international alliances and

partnerships to promote Brunei Darussalam globally and to

key investor markets.

Brunei Darussalam also plans to:

• Develop aviation agreements that promote open air

services such as the Multilateral Agreement on the

Liberalisation of International Air Transportation (MALIAT)

and ASEAN Single Aviation Market (ASEAN-SAM).

Global Interconnectivity:

Air Logistics Hub

The refurbishment of the

Brunei International Airport

in 2015 has seen passenger

capacity double to

3 million



iven the Sultanate’s geographic

location in Asia - the fastest growing region

in the world - its membership of ASEAN and

its augmenting reputation as a

centre for Islamic finance, Brunei

Darussalam is well-positioned for its

financial sector to achieve outward

international integration.

G

Pillar IV: Enhanced International Integration

The forthcoming implementation of the

ASEAN Economic Community integration

will further enhance intraregional trade in

goods, with freer movement of goods,

services, skilled labour, and capital

anticipated.

ASEAN POPULATION IN 2016 (3rd largest in the world)

Source: World Population Clock

China

1,385

million

India

1,333

million

ASEAN

625

million

EU

504

million

US

325

million

Asia’s middle-class

population is forecasted to

grow from about

500 million now to

1.75 billion by 2020.

In 2000, the region

accounted for less than

30% of world

output, by 2014 this contribution

had risen to almost

40%.


Source: Lee Kuan Yew School of Public Policy

Source: IMF



Brunei Darussalam will:

• Participate in ASEAN integration initiatives and contribute

towards the successful implementation of the ASEAN

Economic Community (AEC).

• Participate in trans-border initiatives that will enable the

growth of the financial sector, such as the ASEAN trading

link and the ASEAN Framework for Cross-Border Offerings

of Collective Investment Schemes (CIS).

ASEAN: One Vision – One Identity


• Support the domestic ratification of TPPA. To achieve this,

the country will work on revising several pieces of legislation.

• Continue to be a committed and pro-active member of the

Regional Comprehensive Economic Partnership

• Offer professional support (including back-office) services to

financial institutions based in the large and higher cost

financial centres in the region, with which Brunei Darussalam

has a very long-standing and close economic relationship.

Regional Trade and Support

A land area of

4.46 MILLION sq km,

LARGER than the EU

A population of

626 MILLION,

TWICE as large as

the United States

A combined GDP of

US$2.4 TRILLION,

LARGER than BRAZIL,

INDIA or RUSSIA

As combined economic

potential, it would be

the 7th LARGEST

ECONOMY in the world

The Combined Potential of ASEAN


Source: KPMG


Europe

Russian Federation^

UK*

Ukraine#

Middle East

Bahrain*#

Iran^

Kuwait*#

Oman*#

Qatar*

UAE^

Australasia

ASEAN-Australia-NZ@

Asia

ASEAN#@

ASEAN-China@

ASEAN-India@

ASEAN-Japan@

ASEAN-Korea@

China*#

Hong Kong*

India#

Indonesia*

Japan*@

S. Korea*#

Laos*

Malaysia*

Pakistan*

Philippines^

Singapore*

Tajikistan*

Thailand^

Vietnam*

Source: ASEAN Economic Community 2015: Progress and Key Achievements and BEDB

Legend

* Double Taxation Agreements

@ Free Trade Agreements

# Bilateral Investment Treaties

^ Ongoing negotiations


Brunei Darussalam’s Growing International Partnerships



Human Capital Development

Pillar V: Human Capital Development

runei Darussalam is equipped with a

highly educated, English-speaking and

literate population. A number of national

schemes, institutions and public-private

sector programmes have been established

to raise the financial literacy and financial

discipline standards of the workforce.

Supporting the local higher education

platform that cultivates Islamic Scholars, the

founding of the Centre for Islamic Banking,

Finance and Management (CIBFM) will play

a fundamental role in the further

development of Syariah experts, scholars

and financially literate talent.

B

Within ASEAN, Brunei

Darussalam has the 2nd highest adult

(96.8%) and youth literacy rate

(99.6%).Source: http://www.asean.org/storage




CIBFM to continue to have a key role as a training Centre of

Excellence, spanning:

• Specialised skills in niche areas such as corporate finance,

wealth management, investment advisory services and

Syariah advisory

• Continuous professional development

• Leadership

• Islamic finance

• Research and dissemination of that research to lift Brunei

Darussalam's credibility and visibility as a financial centre

• Industry-Governmental Dialogue

Centre for Islamic Banking,

Finance and Management (CIBFM)


• Raise Financial Literacy Standards: To grow Brunei

Darussalam’s financial services sector, top-down and

bottom-up methods must be adopted to improve

domestic financial literacy standards.

• Align the National Curriculum to the Future Economy:

Closely associating the national curriculum to the

economic vision will help ensure Brunei Darussalam has

a local workforce complimentary to the country’s

economic needs.

Financial Education:

Top-Down Approach

AMBD, alongside

Governmental Ministries, is

implementing numerous

‘grass roots’ schemes to instill

financial discipline across

Brunei Darussalam.




AMBD, in collaboration with government ministries, are to

adopt a number of measures to promote a savings culture,

such as:

I. National roadshows

II. Organised events

III. Digital media marketing

• Raising financial awareness and educational standards

through developing targeted digital and social media

platforms. The intention is to market industry training

programmes, provide online financial education lessons

and offer savings tips to the public.

Developing a Savings Culture


• Continue International Collaboration: Brunei Darussalam

and AMBD are committed to establishing alliances and

partnerships with international institutions, such as central

banks, national regulators and universities.

• Foreign Expertise: Educating and enticing locals towards

the financial sector is critical to Brunei Darussalam's

economic diversification, as well as attracting specialised

foreign talent to bridge the interim shortage whilst building

the relevant financial services experience within the local

workforce.

International in Scope

[Insert Quote QUOTE]

• There are young Bruneians abroad working in international

financial centres. To benefit Brunei Darussalam's financial

services sector directly and to ensure knowledge transfer

takes place, it is fundamental that the country stays in

contact with Bruneians working overseas.

Retaining Local Talent



This section includes the following:

List of Financial Institutions

Licensed by AMBD 31

National Bodies 33

Publications 34

AddendumBrunei Darussalam’s

Financial Services Ecosystem


List of Financial Institutions Licensed by AMBD

(as of November 2016)

Banks

1. Baiduri Bank Berhad

2. Bank Islam Brunei Darussalam (BIBD) Berhad

3. Bank of China (Hongkong) Limited

4. Malayan Banking Berhad (Maybank)

5. RHB Bank Berhad

6. Standard Chartered Bank

7. The Hongkong and Shanghai Banking Corporation

Limited (HSBC)

8. United Overseas Bank (UOB) Limited

9. State Street (Brunei) Sdn Bhd (restricted banking

license)

Tabung Amanah (Trust Funds)

1. Perbadanan Tabung Amanah Islam Brunei (TAIB)

Finance Companies

1. Baiduri Finance Berhad

2. BIBD At-Tamwil Berhad

3. HSBC Finance (B) Berhad

Insurance/Takaful Companies

1. AIA Co Ltd

2. The Great Eastern Life Assurance Co Ltd

3. Tokio Marine Life Insurance Singapore Ltd

4. Audley Insurance Company Sdn Bhd

5. MBA Insurance Company Sdn Bhd

6. National Insurance Company Bhd

7. Standard Insurance Sdn Bhd

8. Tokio Marine Insurance Singapore Ltd

9. Insurans Islam TAIB General Takaful Sdn Bhd

10. Insurans Islam TAIB Family Takaful Sdn Bhd

11. Takaful Brunei Keluarga Sdn Bhd

12. Takaful Brunei Am Sdn Bhd

International Insurance Broker Companies

1. Supremin International Pte Ltd

Domestic Insurance Brokers

1. Willis Insurance Brokers (B) Sdn Bhd

Domestic Insurance Adjusters

1. McLarens (B) Sdn Bhd

Capital Markets Services Licence Holders

1. BIBD Securities Sdn Bhd

2. Baiduri Capital Sdn Bhd

3. Standard Chartered Securities Sdn Bhd

4. Abraaj BICB Advisers Sdn Bhd

5. BNP Paribas Asset Management (B) Sdn Bhd

6. CIMB Investment Bank Berhad

7. Lion Global Investors Ltd – Brunei Branch

8. UOB Asset Management (B) Sdn Bhd

9. Seri Venture Capital Management Sdn Bhd

10. GoodLife Financial Planning Sdn Bhd

11. SBI (B) Sdn Bhd


List of Financial Institutions Licensed by AMBD

(as of November 2016)

Recognised Operators of Foreign Trading Facility

1. Bloomberg Tradebook Singapore Pte Ltd

Domiciled Collective Investment Scheme Licence Holders

1. BIBD Al-Kauthar Funds DCC Incorporated

2. SBI Islamic Fund (Brunei) Limited

3. SBI Islamic Fund (Brunei) II Limited

Recognised Foreign Collective Investment Schemes

1. AlAhli Global Trading Equity Fund

2. AlAhli US Trading Equity Fund

3. AlAhli Europe Trading Equity Fund

4. AlAhli Asia Pacific Trading Equity Fund

5. AlAhli Small Cap Trading Equity Fund

6. AlAhli Healthcare Trading Equity Fund

7. BlackRock Global Funds

8. Franklin Templeton Investment Fund

9. Philip Select Fund

10. Henderson Global Select Funds*

11. HSBC Global Investment Funds SICAV*

*These funds are no longer licensed. They are present only for servicing existing clients.


National Bodies

Authority for Info-Communications Technology

Industry (AiTi)

AITI is a telecommunications regulator, national radio-frequency spectrum

manager and developer of Brunei Darussalam’s ICT industry.

http://www.aiti.gov.bn/

The Brunei Economic Development Board

The BEDB promotes Brunei Darussalam as the preferred investment

destination, on four priority business areas - Life Sciences, Agri-Business,

Information and Communications Technology and the Services industry.

http://www.bedb.com.bn/

Centre for Islamic Banking, Finance and Management

Centre for Islamic Banking, Finance and Management (CIBFM) is the learning

arm under Autoriti Monetari Brunei Darussalam (AMBD), for Brunei

Darussalam’s finance industry. The Centre has been accredited by Brunei

Darussalam National Accreditation Council (BDNAC) as a training institution in

the areas of Banking, Finance and Management.

http://cibfmbrunei.com/

Darussalam Assets Sdn Bhd

Darussalam Assets’ vision is to build a sustainable foundation to spur economic

vitality in harmony with nation-building objectives. The enterprise acts as a

strategic owner Brunei Government-Linked Companies (GLCs).

http://www.da.com.bn/web/

Darussalam Enterprise (DaRE)

DARE (Darussalam Enterprise) is a Statutory Body with the aim to nurture and

support local enterprises from start-up to growth.

http://www.dare.gov.bn/


http://www.bedb.com.bn/

http://cibfmbrunei.com/about-cibfm/

http://www.da.com.bn/web/

http://www.dare.gov.bn/SitePages/Home.aspx



Publications

Brunei Darussalam 10-Year Financial Sector Blueprint

The Blueprint sets out a 10-Year Strategic Framework within which Autoriti Monetari Brunei Darussalam

(AMBD) aims to support in fulfilling Brunei Darussalam Vision 2035 on the financial sector.

http://www.ambd.gov.bn/financial-sector-blueprint

Brunei Vision 2035 – Wawasan Brunei 2035

The Brunei Vision 2035 is a long-term development plan which encompasses Brunei Darussalam’s

National Vision, Strategies and Policies to transform the Country into a nation widely recognised for well-

educated and highly skilled people; improve the quality of life among the top 10 nations in the world; and

have a dynamic and sustainable economy.

http://www.bedb.com.bn/index.php/about-bedb/the-brunei-vision-2035

http://www.ambd.gov.bn/financial-sector-blueprint

http://www.bedb.com.bn/index.php/about-bedb/the-brunei-vision-2035


The information contained in this document has been gathered by Autoriti Monetari Brunei Darussalam and contains data and information which

may have been contributed by various sources in addition to that which is publically accessible and has not been reviewed or substantiated. No

reliance may be placed on the information contained within this document for any purposes whatsoever. There are no representations or

warranties, whether express or implied, about the completeness, accuracy, reliability, or availability with respect to the information contained in

the document. The information is for general purposes only and therefore is not meant to cover specific circumstances. Any reliance placed on

such information is therefore strictly at your own risk. No one should act on such information without appropriate professional advice after a

thorough examination of the particular circumstance. In no event will Autoriti Monetari Brunei Darussalam take responsibility or be liable for any

loss or damage including without limitation, indirect or consequential loss or damage, caused to any person acting or abstaining from action as a

consequence of any information in this document.


Level 14, Ministry of Finance Building

Commonwealth Drive

Bandar Seri Begawan BB3910

Negara Brunei Darussalam

www.ambd.gov.bn

Email: [email protected]

Phone: + 673- 238 4626

Autoriti Monetari Brunei Darussalam

http://www.ambd.gov.bn/

Documents

Brunei Darussalam: Financial Sector Blueprint - AMBD Darussalam I Financial Sector Blueprint I ... that complements the recently published Brunei Darussalam Financial Sector Blueprint